A Sad State of Affairs

Canada’s health care program is one of the most expensive in the developed world yet delivers relatively poor access to physicians, technology, and care. But the rhetoric extolling the greatness of Canada’s Medicare program and Canada’s approach to health care policy continues to stifle discussion and debate.

The reality is that Canada’s approach to Medicare is the problem; changing those very policies that many politicians and pundits defend with their rhetoric would markedly improve the performance of Canada’s health care system.

Among the 28 developed nations who seek to achieve the same goal as Canada, access to healthcare insurance regardless of ability to pay, Canada’s health care system ranks third in health care expenditures (age-adjusted share of GDP).

At the same time, Canada’s health care system ranks 24th among these 28 nations in the number of physicians per 1,000 population (age-adjusted), ranks 13th among 24 nations for which data are available in MRI machines per capita, 18th of 24 nations for CT scanners, 7th of 17 countries for mammographs, and ties for second-last of 20 nations for lithotriptors. Wait times for health care in Canada are also not just unacceptably long but are among the longest in the developed world.

That is hardly a performance worthy of applause. And yet politicians in Canada continue to trot out the rhetoric of Medicare’s greatness and proclaim they can fix Medicare’s flaws with more money and better management.

One has to ask the question: if we are already spending more than almost everyone else and getting less than most in return, how is spending even more going to help?

The answer to why Canadians are getting less while paying more lies in Canada’s approach to health care. Other developed nations, particularly those nations who are doing the best job at delivering on the promise of universal access to high quality care, have taken a very different approach to the management of healthcare resources.

Cost sharing is rejected by many politicians and pundits and is even prohibited by the Canada Health Act. Yet more than three-quarters of developed nations who maintain the goal of access to healthcare insurance regardless of ability to pay require patients to share in the cost of the health services they consume.

The reasoning is straightforward: people spend their own money more wisely than they spend someone else’s. According to research and international evidence, when patients are responsible for some of the cost of their care, they use fewer resources (making more available for other patients and saving money overall), and end up no worse off in terms of health outcomes as long as low-income populations are exempted.

Private competition in the delivery of publicly funded services is another area where Canada’s approach departs from those of many others. More than half of developed nations who maintain universal approaches to healthcare also allow private provision of publicly guaranteed services. The reasoning is again simple: both economic research and international evidence show that the competitive private provision of services is more cost-efficient and produces a higher quality of care than the monopolistic public provision of services that exists in Canada.

Finally, Canada is alone among developed nations in prohibiting private financing of medically necessary care. All of the other nations maintaining the goal of universal access to insurance allow individuals to seek care on their own terms with their own resources when they desire to do so. Again the reasoning behind introducing such a policy is simple: a public monopoly in health insurance means a more expensive and lower standard of care than would be available in a competitive marketplace.

Canada is clearly in the minority among developed nations who maintain universal approaches to insurance when it comes to cost sharing, private competition in the delivery of publicly funded services, and competition in the financing of services.

Canada’s policy approach is also at odds with those of the top performing universal access health care programs, all of whom employ all three of these policies to the advantage of patients and payers alike. Austria, Belgium, France, Germany, Japan, Luxembourg, and Switzerland all deliver universal access to care without waiting lists; and all have cost sharing, private competition in the delivery of publicly guaranteed care, and private competition in the financing of medically necessary care. The same goes for Australia, Sweden, and Japan, who deliver the very best outcomes from care among universal access nations in the developed world.

Of course, proponents of the status quo continue to raise fears of the “Americanization” of Canada’s health care in response to these policy choices. That’s simply not the case: none of these policies would require abandoning Canada’s universal approach to health care. Rather, implementing these policies would allow Canada’s provinces to do a better job at delivering on the promise of universal access to high quality care in a timely fashion regardless of ability to pay.

While many politicians and pundits are spending their time shouting from rooftops about the greatness of Canada’s Medicare program and Canada’s approach to health care, the evidence shows that greatness simply is not there. The reality is that Canada’s health care program delivers poor access at high cost, and that Canada’s unique approach to health care policy is to blame.

What Canadian patients and taxpayers need is less shouting from rooftops and more informed discussion about what works and how to implement it.